1st Sep 2016 10:17
LONDON (Alliance News) - Water Intelligence PLC Thursday said it has acquired a UK-based water services business named NRW Utilities Ltd for a total of GBP575,173, hopefully delivering growth and several synergies with the company's core business.
Water Intelligence shares were trading up 3.5% to 89.0 pence per share on Thursday morning.
The London-listed firm provides non-invasive leak detection and remediation services and is primarily operating in America after incorporating a number of areas that were being developed by franchisees in the US between February and May last year in an attempt to speed up growth in the regions.
Water Intelligence snapped up franchise territories in Miami, Detroit, Eastern Michigan and New York. However, the company has previously stated its aim to reacquire franchise territory in the Commonwealth countries of the UK, Canada and Australia.
The acquisition Thursday of NRW Utilities is expected to bring "several synergies" to the growth of the company's "core" American Leak Detection business and should reinforce Water Intelligence's "Anglo-American partnership".
"First, many US, Australian and Canadian franchise owners currently execute municipal services work as a minor business line. With NRW's experience, its management can supplement American Leak Detection's growth trajectory working with franchisees in the US, Australia and Canada," said the company.
"Second, NRW, as a subcontractor, provided Water Intelligence with leak detection services in the UK during 2015 and 2016. With the NRW platform in the UK, Water Intelligence may now expand its leak detection business by tapping its American Leak Detection technicians to help drive non-invasive and proprietary leak detection solutions in the UK," Water Intelligence added.
"Finally, NRW's technology expertise with sewer and wastewater will help build supplementary products for use by American Leak Detection," the company said.
NRW Utilities was founded in 2014 and offers potable and non-potable, or drinking and non-drinking, water services in the UK, specialising in providing leak detection and asset survey services, in particular in the waste water area.
Revenue during its first full fiscal year that ended in February 2016 amounted to GBP672,000, allowing it to breakeven, Water Intelligence said.
Water Intelligence will make an initial payment of GBP275,173, which includes the repayment of a vendor loan of GBP75,173, funded from existing cash reserves. The other GBP300,000 will be spread out in payments during 2017 and 2018, it said.
"I am delighted to announce the acquisition of NRW which will give us a strategic platform in the UK with an experienced team and an existing book of business similar to our core American Leak Detection business which also continues to grow. Having worked with the NRW leadership team during 2015 and 2016, we are confident that integration will be smooth," said Patrick DeSouza, executive chairman of Water Intelligence.
By Joshua Warner; [email protected]; @JoshAlliance
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